Figure 1.13 shows Mendork's production possibility curve for the only two goods that it produces-guns and butter.

-Refer to Figure 1.13 to answer this question.Which of the following statements is correct if Mendork is currently producing 5 tonnes of butter and 8 guns?
A)This society is using competition to coordinate its economic activities.
B)This society is experiencing either unemployment or inefficiency.
C)This economy is experiencing full employment.
D)This society is not adequately answering the "for whom" question.
E)This economy is growing quickly.

Question

Figure 1.13 shows Mendork's production possibility curve for the only two goods that it produces-guns and butter.
 
-Refer to Figure 1.13 to answer this question.Which of the following statements is correct if Mendork is currently producing 5 tonnes of butter and 8 guns?
A)This society is using competition to coordinate its economic activities. 
B)This society is experiencing either unemployment or inefficiency. 
C)This economy is experiencing full employment. 
D)This society is not adequately answering the "for whom" question. 
E)This economy is growing quickly.

Quizplus · Accepted Answer

If Mendork is producing 5 tonnes of butter and 8 guns, it is not operating on its production possibility frontier (PPF), indicating that resources are not being used efficiently or there is unemployment, leading to inefficiency.

Figure 113 Shows Mendork's Production Possibility Curve for the Only Two